Increasing costs of production are affecting the entire produce industry today, but one issue that is causing a huge upset that may intensify tremendously is the cost and tenuousness supplies of fuel and trucking regulations that have most growers, shippers and even end users on the nervous edge of their seats.
There are several issues currently at hand that are contributing to the problem. The war in Iraq has already had a major effect on the cost of fuel in the U.S., and it stands to become much worse as the conflict there intensifies.Jim DiMenna
According to the Energy Information Administration, Iraq is the third-largest exporter of oil in the world and has the fifth-largest crude reserves.
A story BY Bruce Kennedy on CBS Money Watch [www.cbsnews.com/news/as-iraq-fighting-rages-gas-prices-climb] on June 14 stated that the hike in gas costs follows the battlefield successes of the Islamic State in Iraq and Syria [ISIS], an al Qaeda breakaway group backed by Sunni fighters and other groups in northern Iraq.
The article further stated that the cost of crude rose Friday [June 13] afternoon to nearly $ 107, a 10-month high, amid fears that the mounting insurgency there could lead to major disruptions of oil shipments.
Brent crude futures, an international benchmark, climbed 54 cents to $ 112.96. And prices at the gas pumps have risen for four weeks in a row, with no relief in sight.
There are, however, proposed changes to Federal laws that may allow triple tractor-trailer trucks, longer doubles and longer, heavier single trucks on the Nation’s Federal highways.
This action has its obvious strong opponents who fear increased fatal highway accidents and damage to roads and bridges.
Supporters say the measures would increase productivity, reduce truck traffic, and actually make roads safer. Opponents, however, say they would increase fatal crashes and damage roads and bridges
A May 4 press release from the Coalition for Transportation Productivity stated that there is substantial evidence that improving trucking industry productivity through carefully constructed higher vehicle weight limits on federal highways will save lives by making highways safer and less congested.
The release also stated that the Coalition is asking Congress to address this issue now before America’s highways become even more congested.
Like most new legislations, the final decisions on these issues may take years and therefore can’t offer relief for what producer-shippers are facing today.
Jim DiMenna, president of JemD Farms, headquartered in Kingsville, ON, told The Produce News that transportation and logistics is a constantly growing factor affecting greenhouse growers and shippers.
“We are doing everything possible to coordinate orders with trucks to make sure we fill them to the maximum so that the cost per case is reduced or at least maintained,” said DiMenna. “Part loads are getting more and more costly, and so we are continually focusing strongly on working with our retail partners to make sure that we keep costs down as low as possible. Consolidation is absolutely key.”
Together with its business partners and friends, DiMenna met at the United Fresh expo and plans to again at the PMA Foodservice show and all other venues where opportunities allow, to continue to work on ways to ease the high and rising cost of shipping greenhouse and even field produce so that everyone along the chain can benefit.
“To ship a partial load of produce increases the cost per box by five times,” said DiMenna. “But we know that many clients cannot take full loads. As a group we are working toward strategic partnering–particularly in the produce sector because of the cold chain requirements-to ship full loads that can be broken down at a delivery point that is convenient to all receivers involved.”
DiMenna added that the group sees great opportunities to develop strong relationships even among competing companies because everyone understands the potential advantages.
“If I’m shipping a load of 15 pallets, and another company has an order for an additional 15 pallets there are two trucks on the road,” he said. “If we combine those pallets-even if the receivers are different companies-the savings can be tremendous and trickle all the way to the consumer. Our goal is to be able to a create system that monitors availability, shipment history, tracking and clients’ orders, including their demands as to what carriers we use, we can create a system that can help to offset the high and rising costs of transporting fresh produce. This is a reachable goal, and one that we are striving to accomplish in as short a time period as possible.”